But every bank seems to offer great rates on business lines of credit. How can you really know where you’ll get the biggest line, or the best rates?
In this article, you’ll get the honest truth about:
While each business is different, and there are undeniable advantages to working with smaller community banks, it’s often worthwhile working with a bank that has larger resources at its disposal.
And among American banks, Wells Fargo, Chase, and Bank of America reign supreme.
That said, the three aren’t identical:
Here’s a more detailed breakdown of these three banks, and what they offer small businesses. (If you prefer visuals, click here to scroll down to the chart below.)
Wells-Fargo offers five loan products for small businesses:
Minimum loan amount: $5,000
Minimum credit score of 680.
When it comes to the minimum number of years you need to be in business, Wells-Fargo offers more flexibility for newer businesses than Chase or Bank of America.
While recent closures make it difficult to pinpoint an exact number, there are close to 5,000 Wells Fargo branches in over 40 states, so if national access is important to you that’s something to consider.
Chase. Chase is a great choice for businesses with larger financial needs. They offer six small business loan products:
Minimum loan amount: $5,000.
Chase gives no information about required credit scores or minimum number of years in business.
Bank of America. As mentioned above, Bank of America is known for developing banking relationships with small business owners. They offer — stand well bank — no less than nine loan products for small businesses:
Minimum loan amount: $10,000
Minimum credit score: 670
|Bank of America
|SBA loans and unsecured lines of credit
|businesses with large financing needs and longer repayment periods
|Loan availability and building up a relationship
|Minimum loan amount
|Starting at 8.75% APR (Prime plus 0.5%)
|As low as 5.50% APR
|Minimum credit score required
|Min. time in business required
|Min. annual revenue required
|Up to 25 years
|Up to 25 years
|#of branches nationwide
|Over 4,700 in 40 states
|Over 4,700 in all of the lower 48
|Over 6,000 in 38 states
💡 Pro tip: If you want more at-a-glance overviews of various banks and the differences between them, Investopedia is a fantastic resource that updates regularly.
The short answer? Both.
The long answer is that the two often cancel each other out.
If you find a bank that has great financial services but the loan officers are unfriendly and unwilling to stretch for you, you’ll have a lot of trouble accessing those services.
Similarly, if you’re dealing with great loan officers who want to cultivate a relationship but the bank’s financial services are wrong for your business, you still won’t get the loan you need.
Here are some strategies for finding the right bank and the right banker:
💡 Pro tip: Don’t forget to check online comparison sites for customer reviews. Here are some popular platforms:
When a bank sees something going wrong, it’ll back away.
But a banker who knows you and your business will be there for you when the going gets tough, so invest in this relationship. In fact, if your (great) banker changes banks, it’s worth it to follow them — because the banker often matters more than the bank.
This is a common situation, because the bank process takes several months.
Fortunately, there’s a solution: Alternative business funding. You can get a loan in days or weeks — not months, and qualify more easily than a bank line of credit, because the criteria are less stringent and the approval process is quick.
There are three popular options for alternative financing:
Read more about alternative financing options in our article series here.
👍 Keep in mind: Payroll loans can only be used to cover payroll.
Morris Reichman is the founder and CEO of Payro Finance. Former Vice President at Infinity Capital Funding an alternative finance company, Morris possesses a versatile background in the finance industry. Having spent 7+ years working across global macro operations and start up corporate finance Morris's expertise is in business accounting, risk management and investment analysis. Morris founded Payro Finance to support business owners and ensure their business continuity.